DAX futures: German index poised to extend gains on Tuesday

We examine where IG Markets data suggests the German benchmark will open on Tuesday, 14 April.

Last Thursday marked a relatively volatile day for the DAX: Peaking at 10,649 points and dropping to an intraday low of 10,311 points, the German benchmark ended up finishing out the session firmly in the green – at the 10,564 point level.

On a more granular level, heading into the Easter long-weekend – MTU Aero Engines, HeidelbergCement and Daimler were the best performing German equities, while Siemens, Deutsche Telekom and Merck were the worst performing.

Overall, the DAX looks to have thoroughly shaken off the bearish sentiment that dominated the markets in mid-March. Since 18 March, where the benchmark traded at an intraday low of 8,400 – the DAX has rallied over 2,000 points – equating to a gain of more than 25%.

As of 5:28 am (GMT+2), IG Markets data suggests that the DAX will open some 172.8 points higher, or 1.64% on Tuesday, 14 April.

From a technical perspective, IG’s Chief Market Analyst, Chris Beauchamp, last Thursday noted that the German benchmark has pushed its way back towards a key resistance level.

‘The DAX similarly failed to break a key support level yesterday [Wednesday, 8 April], with the index turning higher rather than break below the 10,098 support level. The subsequent gains have taken us closer towards the 10,592 resistance level, which would create a four-week high if broken.’

Though the DAX has indeed rallied strongly from its March lows, Mr Beauchamp suggests traders and investors should temper their bullish expectations, saying:

‘From a wider perspective, these gains seem unsustainable, with a wider bearish view expected to come back into play at some point. The question is when, and we have not seen such bearish signals come into play yet.’

Other markets in focus

When Asian Pacific markets reopened on Tuesday, the signs were mostly positive, with the Australian ASX 200, Japanese Nikkei 225 and the Chinese China A50 all registering early gains.

The Japanese benchmark was the best performer here: up some 387 points or 2.02% – as of 12:37 (AEDT).

Elsewhere, US Futures – across the Dow, S&P and NASDAQ – in the June contract, were all trading up at the time of writing, suggesting a positive bias at the open.

Mind you, those US benchmarks finished out last week in mixed territory. For example, while the NASDAQ eked out a gain at the close; the Dow and the S&P finished out last Thursday’s session lower.

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